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10 reasons why recruiters should choose FCSA compliant umbrella companies for their PSL

In this article, we continue to look at the importance of recruiters choosing fully compliant supply chain partners for their Preferred Suppliers List (PSL). In our first article, we highlighted why recruiters should choose FCSA compliant contractor accountants for their PSL. This time we will look at how the same applies to our Accredited Members who operate as umbrella companies.

We understand that selecting the right umbrella companies for your PSL is crucial as making the wrong decision can not only damage your company’s reputation, but could result in sanctions from HMRC.

You can however mitigate these risks by choosing to work only with umbrella companies who are FCSA Accredited Members.

Only firms that who have successfully passed the independent annual review against the FCSA Code of Compliance are entitled to display the orange FCSA logo

Our Accredited Members adhere to a Charter which outlines minimum standards and requires the business to operate legally; but for them to qualify for our Accredited Member status, they have to have been audited to confirm that they adhere to the FCSA Code of Compliance. The code is designed to demonstrate to Government, as well as freelancers, contractors and recruiters looking for a service provider, that the company is financially stable, provides high quality professional services and operates to the highest standards of transparency and accountability. This stringent test of their business operations, which is carried out by leading accountancy and legal firms, is a clear commercial differentiator.

We therefore like to think of our Accredited Member umbrella companies as your readymade preferred suppliers list.

Here are 10 reassuring reasons why recruiters should choose FCSA compliant umbrella companies for their PSL:

1. Transparency on Appointment – All umbrella employees receive a detailed financial illustration showing clearly what is received, what is charged and what is paid. This is best practice and also minimises the financial queries that you receive.

2. Employment Rights – All umbrella employees receive full employment rights under their employment contracts. This means that umbrella employees receive all benefits of employment whilst also being a contractor able to fulfil a series of temporary assignments.

3. Pay – All umbrella employees receive pay which is at least at National Living/Minimum Wage level, is paid for holidays and for statutory rights.  This means that the individual receives income during statutory absences, such as annual leave, maternity / paternity leave.

4. AWR – All umbrella employees have their assignment pay either benchmarked or receive Swedish Derogation employment contracts. This means that the worker has the same basic pay and conditions as their permanent counterparts, or receives pay between assignments.

5. Insurance – All umbrella employees are covered by insurances both as employees and whilst on assignment. This means that there is cover in place should it be needed.

6. Pension – All umbrella employees are automatically enrolled in pension schemes compliant with auto-enrolment legislation. This is an important benefit of being employed, and we ensure it is being provided.

7. End of Employment – All umbrella employees receive the full entitlement notice pay whether under Swedish Derogation employment contracts or otherwise. This is an important benefit of being employed, and we ensure it is being provided.

8. Protection – All umbrellas act as employer in Employment Tribunal claims. This minimises your risk.

9. Independent Audit – All umbrella companies are subject to an annual independent compliance audit by the FCSA which is carried out by regulated accounting and legal firms. The audit is undertaken by external assessors to minimise any potential conflict of interests. The audit is undertaken by regulated assessors so that FCSA is assured that they cannot pass the audit unless they actually do meet those standards.

10. Transparency on Audit – All audit report findings are shared with HRMC for full transparency. This means that HMRC know exactly who our Accredited Members are, i.e. which firms meet the standards set by FCSA.

Therefore, when you next review your PSL we would encourage you to choose to work with umbrella companies who are Accredited Members of the FCSA. To help you, you will find a complete list of all members on our website – click here >

Don’t just take our word for it

The Recruitment & Employment Confederation (REC), the largest trade association for the UK’s recruitment sector, also advise their members to use only FCSA Accredited Members:

“We are happy to recommend to all REC members who use or are looking to use a third party supplier of contractor accountancy or umbrella services, to use FCSA Accredited Members to minimise their risk.” – Kevin Green, CEO of REC

FCSA Accredited Member status is the only accreditation recognised by all of the UK’s leading industry bodies, including REC, APSCo and TEAM.

Would you like to find out more about the FCSA?

We would welcome the opportunity to meet with you and your compliance team to tell you more about the FCSA. Contact Julia Kermode, FCSA Chief Executive to arrange a meeting on


This content was developed by Ltd in conjunction with the FCSA Marketing Team.